VideoNuze has learned that Google and Apple have teamed up to privatize the FCC in a transaction preliminarily valued at $42.5 billion. Though the U.S. government is already widely believed to be controlled by corporate interests, this is the first time that a formal deal to transfer ownership of a government agency has been contemplated. The deal has far-ranging implications for the media and technology industries, not to mention for American democracy. VideoNuze has gained exclusive access to the details.

In an interview last night, Google's CEO Eric Schmidt provided background: "Larry, Sergey and I were recently working on this new algorithm to fix the pickle we've gotten ourselves into in China. The boys are still just so incredulous that this is happening; they keep on saying 'We're Google for chrissakes, we can't let mere countries boss us around!' But then we got to thinking, yikes, what if the U.S. government started treating us this way? That would really suck."

He continued, "And then it just hit us all at the exact same nanosecond (we're so wondrously simpatico that way) - what if, instead of being subject to the regulatory powers-that-be, we owned the regulatory powers-that-be?" But then, Larry's like 'Hmm, I'm not so sure about this guys - even though it would be wicked cool, would the public really let us pull it off?' Now, Larry can be a little bit of a Nervous Nellie, but in this case he had a good point. And then, boom, yet another brilliant idea hit us at the same nanosecond (I know it sounds freakish, but this really does happen with the three of us). We thought, 'What company can we partner with whose brand is walk-on-water loved and can do absolutely no wrong? And we all agreed - it's Apple of course!"

In a follow-up interview, Apple's CEO Steve Jobs added further detail, "I was sitting in my office micro-managing the legal weenies on this HTC lawsuit aimed at gumming up the Nexus One's rollout when my iPhone rings with Eric's caller ID. Ordinarily I wouldn't even answer that back-stabbing, lying sack of you-know-what's call but I wanted to rub his nose in our big legal plans. So I nonchalantly answer the phone, 'What's up dirtbag, looking for some more of Apple's product ideas to steal?' And he's like, 'yeah, whatever, look, here's why I'm calling.' And then he proceeds to tell me about this cockamamie scheme that he and those two Doogie Howser co-founder dorks of his have come up with, to privatize the FCC." Jobs went on: "At first, I'm like, 'Only you Google knuckleheads could come up with such a moronic idea as that.' But then I caught myself and realized, 'Wait this could actually be genius.' My problem is I'm flying without a net on this iPad thing. I mean, I've got no content to speak of for the device and if all you can do is watch that YouTube garbage on it when it launches, it will flop for sure. Then I'll have people recalling some of my past blunders and talk of me actually being a mere mortal might start up again, which of course is completely ludicrous."

The issue my iPad content team keep whining about is that all these cable TV networks we're trying to do deals with are shaking in their knickers because they're worried about reprisals from Comcast. But - if we owned the FCC, then we could nuke Comcast back to their 30-channel days and finally give Apple a breakthrough in video. In fact, the new regulatory terrain could be so favorable that even those lame-o Sony dimwits might even get some traction."

Schmidt picks up the story there. "So I have Steve on speaker and I call POTUS (President of the United States) on his Batphone in the Oval Office to pitch him (POTUS gave me the Batphone's number as a thanks for letting him visit the Googleplex repeatedly during the '08 campaign to harvest cash from all our zillionaire employees; plus I couldn't resist showing Steve who really is 'da man). We got a positive vibe right away from POTUS because he conceded, 'Thank God it's just you guys; I thought it might be that meshuga Netanyahu calling to tell me that he's now planning to put up 10,000 luxury condos in East Jerusalem.'

"So anyway, I have to give POTUS credit, he got the merits of the deal right away. Said the government was flat broke and he needed every dime he could scrounge up. That this health care thing he cooked up is way more expensive than he initially calculated. That he needs to beef up his free market chops before the fall mid-terms otherwise those Tea Party nitwits are going to relentlessly razz him about being a socialist again."

"Still POTUS was being a little squeamish and we couldn't quite close him. So in a masterstroke, Steve sweetens the deal by offering him an iPhone - with service for life. POTUS was so excited because he's been hearing about the new premium March Madness app on the iPhone, and how much he'd like to watch the games to distract himself when that windbag Biden starts droning on about God-knows-what (of course, Steve is so sly, he didn't mention that due to AT&T's crappy 3G network, POTUS won't in fact be able see any of the game video). Anyway, I thought the iPhone thing really clinched it for us, but get this - then POTUS shakes down Steve for a couple of iPod Touches. It was incredible - he said the girls have been badgering him about having one for ages, but he's too cheap to buy them himself. So Steve tosses them in too, and boom - the deal is done."

Schmidt continued, "The next thing, I get a call from some sleaze-bag Goldman Sachs banker who tells me Geithner has retained the firm to handle the deal. Apparently Geithner doesn't put one foot in front of the other unless Goldman gets a cut; no exceptions. At first I was nervous that Goldman would want to start running an auction and then I'd have those nimrods in Redmond driving up the price. But he assured me Goldman wants a clean, quick deal too and 'not to worry about Geithner; my colleagues and I on the Street have snookered him so many times, he wouldn't know a good deal if it fell on his head.'

It turns out even though Goldman's gonna take home a $1 billion fee on the FCC deal, that's not what they see the as big play here. Instead, they're gonna use the deal to jump-start a whole new derivatives group to do long-short trades on government agencies. Their experience hosing those idiots in Greece has really got them fired up about the opportunities here.

Concluding, Schmidt said that POTUS called FCC Chairman (and former Harvard Law School classmate) Julius Genachowski to share the news. Apparently POTUS said, "Look Gennie, you're doing a heck of a job down there and I love how the new National Broadband Plan you wrote is secretly intended to bust up the cable, telco and broadcast industries. But this is a great opportunity for you - Steve and Eric want to really turbo-charge your efforts and give you the budget to make this stuff happen pronto. Plus, you'll be the only guy in America to have options in both Google and Apple. How sweet is that?! Just consider it payback for you stuffing the ballot box for me back in law school so I'd win that coveted Law Review Editor-in-Chief election that gave me my start in politics. I've loved the way this business works ever since."

The transaction is scheduled to close by end of Q2 2010.

Note - If you're still scratching your head saying "What the __?" then see the fine print on your calendar - today's April Fool's Day. Enjoy.

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About VideoNuze

VideoNuze is the authoritative online source for original analysis and news aggregation focused on the burgeoning online video industry. Founded in 2007 by Will Richmond, a 20-year veteran of the broadband, cable TV, content and technology industries, VideoNuze is read by executive-level decision-makers who need to get beyond the standard headlines and achieve a deep understanding of online video’s disruptive impact.